Shocked!

David Frum is: (orig emp)

I’m not shocked by much any more, but I am shocked by this: the leaders of one of the great parties in Congress calling on the Federal Reserve to tighten money in the throes of the most prolonged downturn since the Great Depression.

One line in the letter caught my eye as summing up the unreality of the Republican leaders’ position:

We have serious concerns that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy. Such steps may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.

Are they serious? We are living through the most rapid deleveraging of the American consumer since the 1http://www.blogger.com/img/blank.gif930s. Much of that deleveraging is occurring tragically, through the process of bankruptcy and foreclosure. Some is happening more happily, through the increase in the savings rate from the 0 of the housing boom to about 6% now.

Even if consumers wanted to borrow, credit is just not very available to the typical person right now. Some credit, for example on credit cards, is not cheap. In fact, the average APR on credit cards is scraping a record peak: 14.96%. ...

The markets see deflation and depression, not inflation. Yet ironically this non-existent and much dreaded inflation is exactly the remedy we need to lighten the load of consumer debt.

As is, we’re looking at a continued economic slump, more unemployment, and more deleveraging via continuing catastrophic consumer default on mortgages, car loans, credit cards, and student aid. And now the GOP leadership is urging that the Federal Reserve make the catastrophe worse? To what end?

I know what the detractors will say: to the end of defeating President Obama and replacing him with a Republican president. And if you’ve convinced yourself that Obama is the Second Coming of Malcolm X, Trotsky, and the all-conquering Caliph Omar all in one, then perhaps capsizing the US economy and plunging your fellow-citizens deeper into misery will seem a price worth paying to rid the country of him.

A letter from the Republican leadership of both chambers telling the Fed not to intervene in the economy is the clearest sign that they want to tank the economy for political reasons. Unfortunately, that story will not be told by the press, which is scared of taking a stand.

IN OTHER NEWS: Pat Boone: Obama Birth Certificate a 'Fraud’

Photoshopped, according to Pat.

This country is headed in the right direction, wouldn't you agree?.


posted by Quiddity at 9/21/2011 08:45:00 AM